Bring a large quantity of water to a boil in a stockpot. Heat the oil in a large skillet over medium-high heat. Toss in the squash and saute 5 minutes, or until it begins to get golden. Sprinkle in the garlic and saute 2 minutes. Pour in the 1/4 cup water, nutmeg, sage, parsley, salt and pepper, and cover the pan. Cook the squash until tender, about 5 minutes more.
Cook the penne until al dente, about 10 minutes. Drain thoroughly in a colander and return to the pot. Spoon on the squash mixture and toss gently. Serve with a sprinkling of Parmesan and pass more at the table.